Last week, we published a blog post about cryptocurrency scams involving online dating websites.
Unfortunately, this is just one of many methods fraud artists are using to exploit new investors entering the blockchain/cryptocurrency space.
Greed and the allure of making huge profits quickly is blinding otherwise smart and sensible people.
Do NOT put your money into cryptocurrency funds or investments if you don't understand what you're doing.
The following is a list of other common cryptocurrency scams to be aware of and how to avoid them.
"Get rich quick" Cold Callers
Do not invest any money into any crypto fund or investment being offered by cold-callers - especially if you are new to cryptocurrency or don't really understand how cryptocurrency, tokens, ICOs, NFTs, wallets, exchanges, etc. work.
Some immediate red flags to look out for:
- You receive an unexpected phone call presenting you with a great investment opportunity
- You are pressured into making an immediate decision
- You are offered a guarantee of a high return on investment with minimal to no risk. If it's too good to be true, then it generally is.
If you have recently been scammed, be aware that you are also susceptible to being scammed again (also known as a "double dip" scam). You can read more about it on the Financial and Consumer Services Commission News Alert.
What To Do
- DO NOT give them any of your personal information.
- Just hang up the phone.
Phishing Emails and Text Messages
Phishing is a form of scam where you receive an email or text message from a fake sender pretending to be someone else.
The main goal of phishing is to convince you to give up personal data like login credentials, account details or other sensitive information.
Recently, 6000 Coinbase customers were victims of phishing scams where they were tricked into revealing their login credentials by pretending that the user's account had been locked. The email asks the victim to click a fake url address and captures their login information.
Some immediate red flags to look out for:
- You were not expecting an email or text from this person or company
- Poor spelling or grammar mistakes in the email content
- The email address doesn't match the alleged sender
- Asking you to provide information by clicking on a link. The link(s) look suspicious when you hover over them. The link does not look like it goes to where it claims and may be taking you to an illegitimate site
What To Do
- DO NOT reply to the email or text
- DO NOT click on any links or open attachments
- Delete the message or follow the company's policy for reporting it.
Fake Websites and Mobile Apps
This is another phishing scam but deserves its own attention.
Whether it's your first time investing in cryptocurrency or you are an active trader, make sure you are downloading the real app or logging onto a genuine website.
There has been an uptick in fraudulent activity with Google Ads, where scammers buy ads that direct users to fake cryptocurrency exchanges and wallet apps. It's alarming how these sites can look practically identical to the real ones.
Some immediate red flags to look out for:
- The domain url looks suspicious (e.g. being directed to binances.com instead of binance.com)
- The app asks you to pay a fee to mine cryptocurrency on your phone
What To Do
- In your Google search results, DO NOT click on Google Ads. Go to the organic search results instead
- Only download apps and wallets from official sources & channels associated with the cryptocurrency
- Never share your wallet password or private keys online
Stay Alert and Protect Yourself
As the blockchain/cryptocurrency industry continues to see significant inflows of money, it's essential that new investors be aware of these scams and not fall victim.
To summarize:
- Never give out any personal details to unsolicited callers
- Never click on links and attachments from suspicious or unsolicited emails or text messages
- Always double-check websites and apps to ensure that they originate from official sources
If you are interested in putting your monies into some kind of blockchain or crypto investment, make sure you conduct extensive due diligence on the company or exchange before committing any funds.
Remember to do your own research into the company or exchange in question, where it's located, if it has appropriate permits/licenses in Canada, and if the principals of the company or exchange are located in Canada.
Simply because the company or exchange has a Canadian address listed on their website doesn't mean it's a Canadian company or that the address is genuine.
Resources for reporting a scam:
- Submit a complaint to the Financial and Consumer Services Commission
- Report fraud to the Canadian Anti-Fraud Centre
The preceding content is for informational purposes only and does not constitute legal or professional advice. To obtain such advice, please contact our offices directly.
Last updated on April 6th, 2022 at 04:34 pm